SINGAPORE--PayPal will phase out payments made by Singapore users to foreign-registered non-profit organizations (NPOs) and charities from March 21, 2013.

This move is due to the lack of the necessary remittance license it needs to facilitate such services, as required by local regulator Monetary Authority of Singapore (MAS), Lawrence Chan, PayPal's Asia-Pacific vice president of merchant services for Southeast Asia and India, told ZDNet.

PayPal's lack of a remittance license prevents it to run some services in Singapore.

"It is a very small percentage of our total business, but we don't take for granted that every bit of our consumers counts," Chan said, declining to reveal exact figures.

PayPal users in Singapore will continue to be able to support local NPOs and charities, and commercial transactions would not be affected, he noted.

The online payment services provider plans to continue to focus on its primary service in Singapore, which is "to enable safer, faster payment for online and mobile commercial transactions for consumers and businesses".

Last month, PayPal ended Personal Payments in Singapore also to adhere to "regulatory instructions" due to the lack of the same business license. This service was used to facilitate sending money as a gift, returning money owed to friends, cash advances, and paying bills such as rent or utilities.

According to Chan, Singapore is so far the only country where it has had to stop these services due to the need for the license. He pointed out PayPal would continue to take a "very proactive" stance with regulators around the world.

When asked if Paypal would consider applying for a remittance license, Chan declined to comment explaining the company did not reveal future product plans.

PayPal's security policies over payment transfers have made it a target of criticism by some users running personal projects. In 2011, a PayPal accounts holder, Regretsy.com, found its funds frozen during a personal charity donation drive after PayPal's safety measures kicked in reportedly due a spike in personal payments. The company eventually released the fundsafter further verification which it said was important to "protect our customers and to protect our business".